Five Questions to Ask Your FHA Lender

If you have never purchased a home before, you might not know where to start when it comes time to shop around for the right lender.

Will the Lender Approve My FHA Home Loan Application for a Specific Property Type?

For example, if you want to purchase a tiny home or any other unique property, check early to see which lenders might be willing to issue a loan for that property type.

With FHA mortgages, the more conventional the housing type (condo, townhome, manufactured home) the better your chances of finding a lender willing to offer an FHA mortgage on that type of home.

How Long Should I Prepare for the FHA Application?

The lender’s answer will depend on your current FICO scores, credit history, job history, and other variables.

The reason to ask the lender this question? To understand how good the loan officer thinks your credit is now.

You can get the same results by filling out a pre-qualification form on a lender’s website, but some aren’t quite ready to do that but need the information anyway. Talking to a loan officer can help.

My Credit Isn’t as Good as I’d Like. Can I Make a Higher Down Payment to Compensate?

The answer to this question will depend greatly on your FICO scores, loan repayment history, and other factors.

The lender may be willing to accept a higher down payment if the borrower’s financials are acceptable to that financial institution. But the standards will vary depending on the housing market, the bank, and other factors.

Conversely, if your credit is strong, ask the lender for a break on the interest rate. It never hurts to ask, and you may find some lenders willing to negotiate within reason, but much depends on your circumstances.

Can I Use Down Payment Assistance on My FHA Loan?

That’s not the no-brainer question some might assume it is. Some states may not have an active down payment assistance program when you apply for reasons that might include a lack of funds, changes in the program, or other issues.
 
Some kinds of FHA loans are unsuitable for downpayment assistance, at least in the eyes of the lender. You may find some FHA One-Time Close construction loan lenders simply don’t allow down payment assistance on those loans. It’s best to ask early.

Which Closing Costs Can I Finance?

Some costs can be rolled into the FHA loan, while others are required to be paid in cash at closing time. Some costs can be financed but must be paid in full or 100% financed. For example, no partial financing is allowed for the FHA mortgage insurance fees.

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